Monday, February 09, 2009

Dubai's population and job opportunities are still growing

According to the International Monetary Fund (IMF), the UAE economy is expected to grow about three per cent this year. Although the IMF did not make any specific projection on the economic growth of the UAE, Massod Ahmad, IMF director for Middle East and Central Asia, said the UAE economy is not in recession and the IMF is "comfortable" with the growth forecasts of about three per cent made by the government.

The UAE national GDP growth this year to be between 2.5 per cent and 3 per cent. For Dubai it is expected it to be slightly less than that....Dubai's real GDP growth was more than eight per cent last year, whereby sectors such as real estate, construction and tourism have been challenged by the global economic gloom.

Dubai official maintained that despite these challenges, Dubai's growth will remain in positive territory this year and the emirate is doing everything to protect employment and human capital which is central to the growth of Dubai.

Commenting on rumours that large numbers of expatriates are leaving the country and the government is still in a state of denial, Dubai official said on the contrary, the government has been very proactive dealing with the impact of the global recession and continuing its commitment to projects that are viable under the current circumstances.

So read the report by Robert Ditcham below (again, I have some problems to believe the report though):

Dubai’s population is continuing to grow, a government official said yesterday, despite reports that the economic downturn has resulted in the loss of thousands of jobs.

The emirate issued 1,000 more visas a day than it cancelled last month, Raed Safadi, the chief economist for the Government of Dubai, said yesterday at a conference.“They’re still positive,” he said, referring to the net entries of people to Dubai.

However, the growth in net entries has slowed in recent months. Based on Mr Safadi’s figures, 31,000 more people received Dubai work visas than those who cancelled their labour or residence permits in January.The emirate issued a net increase of about 40,000 visas in December and in a normal month issues a net of 59,000 work visas, he said.Dubai’s Ministry of Labour is cancelling an average of 1,500 work permits and visas a day, according to some newspaper reports. Mr Safadi, declining to confirm that number, said the city needed to support growth in consumer demand and job creation to guarantee the economy’s expansion in the future.

Late last month, a senior officer at the Abu Dhabi Residency and Naturalisation Department said the emirate received 400 to 1,000 new visa applications every day. He said the number of cancellations remained stable, 50 to 200 a day.Speculation about the extent of job losses and outward migration across the country prompted an economist at Standard Chartered Bank, Mary Nicola, to suggest last month that “the biggest risk facing the UAE economy is related to its labour market”.

The UAE’s redundancies started last year when Morgan Stanley laid off 15 per cent of its Dubai staff and Goldman Sachs let go 10 per cent of its workforce.Layoffs then spread to local firms in the property and financial services sectors.Nakheel dismissed 15 per cent of its staff and Shuaa Capital nine per cent in the fourth quarter last year.Other property developers and construction companies have laid off staff after scaling back projects and cancelling new developments.

Morgan Stanley has said US$263 billion (Dh71.6bn) worth of projects have been cancelled or postponed in the UAE.

In recent weeks, Mashreqbank and Damac Properties have cut jobs, while major hotel chains are laying off staff in reaction to sinking occupancy rates.